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Short-term ownership economics?

Short-term ownership economics?

Submitted by smorgasbord on 31. Mai 2011

I'm Model S reservation holder #P3995.

I'm thinking of making the wait bearable by buying a Roadster and driving it for a year and half or so, then selling it to get the funds for my Model S. I can probably swing owning both cars for a few months.

I know it's speculation at this point, but what are your guesses as to resale value, especially when there aren't any more new Roadsters to buy? I'd like to hear anything, even anecdotal stories, from people who've bought used or sold Roadsters. I hear that some early owners sold their cars to buy the newer model.

My thinking is that the Roadster I buy today should go up in value. I believe that long-term, the cars will be collectible, but history says that could take a decade or more. It might take less time for the Roadster considering the nature of its 2500 unit limited run, supercar performance, and historical significance - not to mention the lack of an engine to wear out. Short-term, I'm more concerned, though.

If the worst situation for me is that I lose $10K after 18 months, that would be acceptable ($500/month net cost). WIth the current Fed/State incentives, the tax I pay on buying the car would be covered. That leaves the destination charge (almost $2000!) and any depreciation.

It would be very risky. If you can only afford to lose $10,000 and if losing more would put your ability to get the Model S in jeopardy, I'd just wait for the Model S. Better yet, save up for a Signature Series and get your car first.
Buying a used Roadster would be a different story possibly. You're much less likely to lose a lot of money buying a used car then selling it that taking the hit on a new car. I'm not sure you're able to order a new custom Roadster in the US anymore anyway.

DHrivnak |
01. Juni 2011

I agree buying a used Roadster is a great way to hedge your bet. I purchased a used one and I have been VERY pleased with my purchase. I could not have affored one new but a lightly used Tesla was possible.

If you do get a Roadster be warned it is a joy to drive. It is wickedly fast and corners like nothing else. A model S is a totally different type of car.

smorgasbord |
02. Juni 2011

Thanks much for the well considered replies.

Here in the US, Fed and State incentives only apply to new cars, not used. They add up to $12,500 right now for CA, so I would expect that's one depression on used car prices. About 14 other states have incentives as well.

When I look at ebay, cars.com, etc., none of the cars I see are in or very near CA, so I think there's a local market effect. I'm fortunate enough to live in No. CA, home of Tesla, so there are service and support related benefits, not to mention high brand awareness. I think that contributes to a larger demand for the cars, which is helping to maintain prices here.

It's probably just me rationalizing the purchase, but I still believe that once new models are no longer available prices on the used market can only rise. The car is not only unique in its performance, it's got limited production numbers and historical significance. Those 3 things usually mean good price support.

Anyway, I put my money where my keyboard is and bought VIN1298, to be delivered next week. As they said in The Big Chill: "Rationalization is more important than sex." ;^)

PS: BTW, as of a couple days ago, new cars could still be ordered custom, but some options are disappearing. For instance, you can't order a non-Sport nor Rally seats. So, if you're on the fence about buying new, indecision may make the decision for you pretty soon.

dsm363 |
02. Juni 2011

Congrats. You'll love the Roadster. With the incentives, you have a small chance of being able to sell if for less than a $10,000 loss but it will still be difficult. I bet you'll want to keep the Roadster and get the Model S. The Roadster is that fun.

rsdio |
10. Juni 2011

I guess I'm too late to point out that there are still over 40 roadsters sitting in Tesla's inventory.

Any attempt to estimate future value, whether it rises above $90K or not, would have to consider a few things:

A) Tesla was forced to make Roadsters on spec during winter months because nobody was custom-ordering them. If demand were really that high, there shouldn't have been a single on-spec roadster manufactured.

B) The market for this particular vehicle may have been saturated, or at least very nearly saturated. Diminishing supply does tend to raise prices, but only when there is sufficient demand. In a saturated market, a used roadster will not command top dollar.

C) The unsold inventory is testament to the fact that it is difficult to unload a Roadster at $117,450 even if it is brand new with only 146 miles on the odometer (see the Chicago Tesla Store).

D) When I passed on my first chance at a Roadster (2009), I was told that any more than 100 miles on the odometer would stifle my chances of an easy resale.

If you're willing to wait long enough, you might get your asking price. But I have a feeling that you'll lose at least $28,000 if not $50,000. Then again, if Tesla ever sells these last 40 or so Roadsters the demand might recover.